Hewlett-Packard CEO forges her own path

July 30, 2001|By Therese Poletti, San Jose Mercury News.

Several top executives departed. "Before, each of the presidents inside of HP very much was managing their own business," said Ann Livermore, who heads HP's services unit and was the lead internal candidate to succeed Platt. "And the goal was to not have anybody else put their fingers in your business, just let me run my own thing. ... With the new structure, you have to be willing to have people help you."

Fiorina implemented a tougher review process last year to get rid of more underperformers. Modeled on the process at Cisco Systems, HP raised the percentage of employees that are ranked as non-performers and as high performers.

Unlike previous CEOs

Employees say that Fiorina's glamorous, even regal demeanor has made it more difficult for them to relate to her.

Previous HP CEOs were regular guys. Platt, for example, would stand outside the office building chatting with colleagues while he indulged in a cigarette break.

However, the real measure of a CEO is a company's financial performance.

Fiorina wowed Wall Street with 15 percent revenue growth for the year ending Oct. 31, 2000, her first full year at the helm. She won over new customers, such as Cadence Design Systems. Investors cheered, sending HP stock to a split-adjusted high of $67.44 last July.

But despite signs of an economic slowdown, Fiorina surprised analysts last December by predicting that HP's sales would continue to grow at 15 to 17 percent a year.

Since that meeting, Fiorina has been forced to lower forecasts twice. And last month, she said HP might not meet her May prediction that revenue would be flat to down 5 percent. Last week, she said third-quarter revenue would be down 14 percent to 16 percent from the year-earlier period.

Overall, since Fiorina took the helm, HP shares have fallen more than 40 percent, closing Friday at $24.36

Whether Fiorina can eventually succeed in restoring HP's lost luster--a challenge some say is similar to the one Lou Gerstner faced at IBM--won't be clear until the economy improves.